Aviation Safety Management System Building a business case ...

Aviation Safety Management System – Building a business case for Wildlife Management

Brisbane Airport

2AAWHG – Workshop July 2017 Brisbane – Business case for Wildlife Management

AVIATION SAFETY MANAGEMENT SYSTEM

Cost of capital

» Takes into account the time value of money when making investment decisions. The time value of

money is a function of Weighted Average Cost of Capital (WACC). The pre-tax WACC of 10.95% is

to be used when developing project value propositions.

» This is different to a hurdle rate which is typically higher to account for downside risk.

Financial metrics

» Primarily focuses on Net Present Value (NPV) and Internal Rate of Return (IRR). However other

metrics include: Payback period, discounted payback period and return on assets. An explanation of

each metrics is below:

» NPV: is the difference between the present value of cash inflows and the present value of cash

outflows. NPV is used in capital budgeting to analyse the shareholder value created and to compare

a number of projects in the same dollar terms.

» RR: is the discount rate that makes the NPV of all cash flows equal to zero.

» Payback period: The amount of time required for a projects inflows to break even

» Discounted payback period: The amount of time required for a projects inflows (which has been

discounted into today’s dollars) to break even

» Return on asset: a measure to determine how efficiently an asset is at generating earnings.

If the project commencement decision is being made prior to when it is required, clearly articulate

the reasons and take into account the time value of money impacts on returns.



Evaluating projects based on strategic drivers

There are specific considerations based on the strategic driver of the project. Strategic drivers are:

» Asset Management

» Capacity

» Compliance

» Customer Experience

» Financial

» Risk reduction



Risk reduction

» When a risk is identified as a strategic driver in the

Initiation phase, it needs to be supported by a risk

assessment to demonstrate the current profile of the

risk. Describe the following

» Current likelihood

» Consequence

» Risk exposure


AVIATION SAFETY MANAGEMENT SYSTEMAero projects

» Aero projects refer to those covered under the 5 year aero pricing agreement which generate aeronautical

revenue.

» Aeronautical revenue is largely based on a charge per passenger (based on the aero agreement) and

actual passenger throughput.

» The charge per passenger is based on the building block model. It is a function of BAC’s asset base,

forecasted costs (capex and opex) and depreciation, divided by expected passengers.

Considerations for aero projects:

Consider the following when evaluating capital projects:

» Is this aeronautical capital expenditure required?

» Over spending will result in BAC not recovering the over spend

» Deferring capex will be favourable during the pricing period as BAC is paid

» Is the capex included in the business plan?

» If capex is included in business plan, future dividends will be based on the higher asset value (thus

impacting valuation)

» Are passengers above or below aero agreement forecasts?

» Is this aeronautical capital expenditure included in the aero model

forecast? If yes,

» Is the timing before or after the aero agreement forecast?

» Considerations for aero projects



• What is the total cost to deliver this solution?

• The upfront costs of the potential solutions need to be developed. These should be all inclusive and

extend beyond the costs incurred by your relevant department in delivering this option.

• A new development must incorporate total costs to deliver a fully integrated option, taking into account

» Concept development

» Cost of planning & approvals

» Earthworks

» Construction

» Critical supporting infrastructure – power, water, sewerage

» Supporting requirements

» Commissioning



Post feasibility analysis

» 12 months after a project has been completed and asset has

integrated into operations, a post feasibility analysis is

required to ascertain the actual benefits versus the intended

benefits. Areas for focus are performance against schedule,

cost and scope and returns.

As indicated in the figure above, the Straw Necked Ibis and the

Australian White Ibis have significantly reduced in average

numbers per count by 51% and 90% respectively.


L303 - Airside Drainage Upgrade - Landscaping

Landscaping costs capitalised - asset #010385

Capitalised 30 June 2014

Contract - L303 - Park Forge Pty Ltd as Trustee for the Park Forge TrustL303

Contractor - Park Forge Pty Ltdxxx

Item Description Amount Allowed

Lump sum schedule 1 - Schedule of prices - Part B (Page 148)

10.2 Wetting agent prior to (And otr within) application of Hydroseed 20,712.60 20,712.60

10.11 Conditioning of topsoil to required charachteristics prior to respreading 75,000.00 75,000.00

10.16 Works associated with obtaining Certificate of Compliance 1,770.00 1,770.00

10.17 All other items not included elsewhere 1,205.96 1,205.96

Irrigation of hydroseed and turf Establishment and maintenance 252,388.00 252,388.00

10.18 Defect Liability Period attendance 7,363.20 7,363.20

Schedule of rates schedule 2 - Part A (Page 157)

10.2 Grass seed stabilisation (Hydroseed) including Avanex cover crop 196,625.74 196,625.74

10.3

Supply and lay Greenless turf , install u-pins to open drains including to 30mm

behind batters 69,300.00 69,300.00

10.4

Grass seeding and establishments including watering of disturbed surface in

Spoll Disposal Area and Contractors Depot (behind Gate 48) 35,732.00 35,732.00

10.5

Grass seeding and establishments including watering of stockpiles in Spoll

Disposal Area 17,866.00 17,866.00

10.6 Load, cut and respread from stockpile 75mm thick of topsoil to airside area 146,179.95 146,179.95

10.8

Respread of 75 mm topsoil from stockpile to disturbed surface in Spoll Disposal

Area and Contractors Depot 5,910.00 5,910.00

10.9

Testing of stripped topsoil to assess suitability for reuse and or remediation

measures required 1 test per 1000m3 5,640.00 5,640.00

10.1 Weed control treatment to topsoil prior to respreading 21,790.90 21,790.90

10.19 Basic soil testing per test 14,727.50 14,727.50

Total 872,211.85 872,211.85

Allocation of indirect costs (see below) 254,171.53 254,171.53

Total asset capitalised - #010385 1,126,383.38 1,126,383.38

Specific construction costs to be allocated across all assets in the project:

Consulting (Arup,Aurecon,Douglas) 300,413.02

Project Management 297,274.95

Aerial Imaging of Airside Drainage 5,160.00

Qleave 24,635.00

Construction Approval Fees 21,000.00

Insurance 26,703.52

Consulting design stage 155,252.61

Utilities - water and electricity 80,287.68

Losses 390.36

Legals 10,406.48

Other construction costs 22,283.61

Total specific construction costs to be allocated: 943,807.23

14AAA Brisbane OPS SWAP Presentation: Aviation Safety Management System - Brisbane

Airport


• Consult and communicate;

• Comply with relevant legislation, standards, codes and other

requirements; and

• Continuously improve.

Our Aviation Safety Policy objectives are to:

• Identify Hazards and Manage risks;

• Foster leadership;

Aviation Safety Management System

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